A new rule, replacing rule 6 of the Solicitor's Practice Rules 1990, came into force on 16 January 1998.

It is set out in full below; it supersedes all previous versions of practice rule 6, including the rule made in October 1997.The Solicitors' Publicity Code 1990 has also been amended to allow solicitors to advertise a composite fee for property selling and conveyancing services, lower than the sum of the two separate fees, and the relevant provision is also set out below.

The new rules complete the staged relaxation, since July 1997, of restrictions on solicitors who do property selling.

The deregulation has been accomplished in three stages:-- in July, the Solicitor's Separate Business Code 1994 was amended;-- in October, rule 6 of the Solicitors' Practice Rules 1990 was amended; and-- in December, rule 6 of the Solicitors' Practice Rules 1990 was again amended, replacing the October provisions.Stage one -- hived off estate agenciesIn July 1997 the Law Society Council amended the Solicitors' Separate Business Code 1994 to relax restrictions on solicitors with 'hived off' estate agency businesses.

They were not previously allowed to do conveyancing for the 'hived off' estate agency's buyers, or to do conveyancing for its sellers if the agency provided mortgage-related services to the buyer.The July rule allowed solicitors with a jointly owned 'hived off' estate agency to do a buyer's conveyancing, or to do a seller's conveyancing where the 'hived off' estate agency provided mortgage services to the buyer.

The 'hived off' estate agency must, however, be owned jointly with at least one other business; the buyer must give written, informed consent; and different individuals must deal with the work for seller and buyer.The Council will now consider whether to bring the provisions relating to 'hived off' estate agencies more into line with those which apply to solicitors who sell property through their solicitors' practices.

This could involve both some tightening up and relaxation of the requirements.Stage two -- the introduction of SEALsIn October 1997 the Council partially relaxed restrictions on solicitors who do property selling as solicitors.

They were not, if acting as seller's agent, previously allowed to provide either mortgage or conveyancing services to buyers.The October rules allowed solicitors to provide mortgage services to the buyer through a SEAL, and allowed a firm participating in a SEAL to act in conveyancing for a buyer (provided it was not acting for the seller).

A SEAL has four essential characteristics:-- it is a corporate b ody recognised under s 9 of the Administration of Justice Act 1985 by the Law Society -- a 'recognised body';-- it is owned by at least four firms of solicitors, none of which have a controlling majority of the shares;-- it does not itself undertake conveyancing; and-- it is clearly separate from its participating practices.The buyer and the seller must give their written, informed consent, and different individuals must deal with the work for seller and buyer.Stage three -- the fullest deregulationIn December 1997 the Council relaxed the restrictions still further, replacing rule 6 again, and relaxed a related publicity restriction.

Solicitors who do property selling through a practice other than a SEAL may now-- provide a full range of estate agency services through a practice -- ie, act as seller's agent and provide mortgage services to the buyer; and-- act for the buyer in the conveyancing if one of the 'conveyancing exceptions' applies; and-- advertise a composite fee for less than the sum of the two separate fees, for property selling and conveyancing services.The buyer and the seller must give their written, informed consent, and different individuals must deal with the work for seller and buyer.SOLICITORS' PRACTICE (PROPERTY SELLING) AMENDMENT RULE 1998Rule dated 16 January 1998, made by the Council of the Law Society with the concurrence of the Master of the Rolls under section 31 of the Solicitors Act 1974 and section 9 of the Administration of Justice Act 1985.Delete Rule 6 of the Solicitors' Practice Rules 1990 and substitute:"Practice rule 6 (avoiding conflicts of interest in conveyancing, property selling and mortgage related services)(1) (General)This rule sets out circumstances in which in solicitor may act for more than one party in conveyancing, property selling or mortgage related services, in connection with:(i) the transfer of land for value at arm's length;(ii) the grant or assignment of a lease, or some other interest in land, for value at arm's length; or(iii) the grant of a mortgage of land.The rule must be read in the light of the notes.NOTES(i) 'Solicitor' (except where the notes specify otherwise) means a solicitor, his or her practice, and any associated practice, and includes a SEAL; and-- 'associated practices' are practices with at least one principal in common;-- a 'principal' is a sole practitioner, a partner in a practice (including a registered foreign lawyer partner), a director of a recognised body, a member of or beneficial owner of a share in a recognised body, or a recognised body; and-- a 'SEAL' (Solicitors Estate Agency Limited) means a recognised body which:(a) does not undertake conveyancing;(b) is owned jointly by at least four participating practices which do not have any principals in common and none of which own a controlling majority of the shares; and(c) is conducted from accommodation physically divided from, and clearly differentiated from that of any participating practice; and-- a 'participating practice' means a practice one or more of whose principals is a member of, or a or beneficial owner of a share in, the SEAL.(ii) 'Property selling' means negotiating the sale for the seller.(iii) 'Mortgage related services' means advising on or arranging a mortgage, or providing mortgage-related financial services, for a buyer; and-- 'seller' and 'buyer' include lessor and lessee.(iv) Whether a transaction is 'at arm's length' will depend on the relationship between the parties and the context of the transaction, and will no t necessarily follow from the fact that a transaction is at market value, or is stated to be on arm's length terms.

A transaction would not usually be at arm's length, for example, if the parties are:-- related by blood, adoption or marriage;-- the settlor of a trust and the trustees;-- the trustees of a trust and its beneficiary or the beneficiary's relative;-- personal representatives and a beneficiary;-- the trustees of separate trusts for the same family;-- a sole trader or partners and a limited company set up to enable the business to be incorporated;-- associated companies (ie, where one is a holding company and the other is its subsidiary within the meaning of the Companies Act 1985, or both are subsidiaries of the same holding company);or-- a local authority and a related body within the meaning of paragraph 6(b) of the Employed Solicitors' Code 1990.(v) 'Mortgage' includes a remortgage.(vi) Nothing in the rule allows a solicitor to act in breach of Rule 6A(5) (acting for seller and one of two prospective buyers), or any other rule or principle of professional conduct.(2) (Solicitor acting for seller and buyer)(a) A solicitor must not act for seller and buyer:(i) without the written consent of both parties;(ii) if a conflict of interest exists or arises; or (iii) if the seller is selling or leasing as a builder or developer(b) Otherwise, a solicitor may act for seller and buyer, but only if:(i) both parties are established clients; or(ii) the consideration is £10,000 or less and the transaction is not the grant of a lease; or(iii) there is no other qualified conveyancer in the area whom either the seller or the buyer could reasonably be expected to consult; or(iv) seller and buyer are represented by two separate offices in different localities, and:(A) different solicitors, who normally work at each office, conduct or supervise the transaction for seller and buyer; and(B) no office of the practice (or an associated practice) referred either client to the office conducting his or her transaction; or(v) the only way in which the solicitor is acting for the buyer is in providing mortgage related services; or(vi) the only way in which the solicitor is acting for the seller is in providing property selling services through a SEAL.(c) When a solicitor's practice (including a SEAL) acts in the property selling for the seller and acts for the buyer, the following additional conditions must be met:(i) different persons must conduct the work for the seller and the work for the buyer; and if the persons conducting the work need supervision, they must be supervised by different solicitors; and(ii) the solicitor must inform the seller in writing, before accepting instructions to deal with the property selling, of any services which might be offered to a buyer, whether through the same practice or any practice associated with it; and(iii) the solicitor must explain to the buyer, before the buyer gives consent to the arrangement:(A) the implications of a conflict of interest arising; and(B) the solicitor's financial interest in the sale going through; and(C) if the solicitor proposes to provide mortgage related services to the buyer through a SEAL which is also acting for the seller, that the solicitor cannot advise the buyer on the merits of the purchase.NOTES(i) if a builder or developer acquires a property in part exchange, and sells it on without development, he or she is not, for the purpose of this rule, selling 'as a builder or developer'.(ii) The test of whether a person is an 'established client' is an objective one; that is, whether a reasonable solicitor would regard the person as an established client.-- A seller or buyer who is instructing the solicitor for the first time is not an established client.-- A person related by blood, adoption or marriage to an established client counts as an established client.-- A person counts as an established client if selling or buying jointly with an established client.(iii) The consideration will only count as £10,000 or less if the value of any property given in exchange or part exchange is taken into account.(iv) Even where none of the other exceptions apply, a SEAL may act for the seller, and provide mortgage related services to the buyer; one of the participating practices may do the buyer's conveyancing, and another participating practice may do the seller's conveyancing.(v) 'Solicitor'-- in paragraph (2)(b)(iv)(A), means any individual solicitor conducting or supervising the matter; and-- in paragraph (2)(c)(i), means the individual solicitor supervising the transaction.(3) (Solicitor acting for lender and borrower)(a) A solicitor must not act for both lender and borrower on the grant of a mortgage of land:(i) if a conflict of interest exists or arises; or(ii) on the grant of a private mortgage of land at arm's length.(b) A solicitor who proposes to act for both lender and borrower on the grant of an institutional mortgage of land, must first inform the lender in writing of the circumstances if:(i) the solicitor or a member of his or her immediate family is a borrower; or(ii) the solicitor proposes to act for seller, buyer, and lender in the same transaction.NOTES(i) An 'institutional mortgage'" is a mortgage on standard terms, provided by an institutional lender in the normal course of its activities; and-- a 'private mortgage' is any other mortgage.(ii) 'Solicitor' in paragraph (3)(b)(i) means any principal in the practice (or an associated practice), and any solicitor conducting or supervising the transaction, whether or not that solicitor is a principal; and-- "immediate family' means spouse, children, parents, brothers and sisters.(iii) The lender must be informed of the circumstances, in accordance with paragraph (5)(b) so that the lender can decide whether or not to instruct the solicitor.(iv) A lender's instructions may require a wider disclosure than this rule requires; and a solicitor must assess whether the circumstances give rise to a conflict.

For example, there will be a conflict between lender and borrower if the solicitor becomes involved in negotiations relating to the terms of the loan.

A conflict might arise from the relationship a solicitor has with the borrower -- for example, if the solicitor is the borrower's creditor or debtor or the borrower's business associate or cohabitant.'SOLICITORS' PUBLICITY (PROPERTY SELLING) AMENDMENT PROVISION 1998Provision dated 16 January 1998 made by the Council of the Law Society with the concurrence of the Master of the Rolls under s 31 of the Solicitors Act 1974 and s 9 of the Administration of Justice Act 1985, regulating solicitors' publicity in connection with property selling and conveyancing.Delete paragraph 5(d) of the Solicitors' Publicity Code 1990 and substitute:'(d) Composite feesSolicitors may quote a composite fee for two or more separate services offered, but(i) the solicitor must if required quote separate fees for the individual services; and(ii) the solicitor must if required carry out any one only of those service s on the basis of the separate fee quoted; and(iii) except in relation to a composite fee for property selling and conveyancing services, the separate fees quoted may not total more than the composite fee."